SoftBank to Invest Around $500 Million More in OneWeb Satellite-Internet Venture

By Andy Pasztor and Mayumi Negishi

Japan’s SoftBank Group Corp. has agreed to invest roughly $500 million more in satellite broadband provider OneWeb Ltd., according to a person familiar with the details, boosting the U.S. startup’s plan to offer significantly faster internet connections world-wide than most traditional systems, either space-based or terrestrial.
even as Greg Wyler, OneWeb’s founder and executive chairman, disclosed over the weekend that his company already is designing and seeking suppliers for a more powerful new generation of satellites. He said those eventually are slated to deliver ultra-high-speed connectivity, including across rural or developing regions, approximately as fast as typical fiber optic networks.

The precise size and structure of SoftBank’s additional investment could change, said the person familiar with the details and others close to the talks. But Mr. Wyler and SoftBank founder Masayoshi Son, they said, agreed in principle on the cash infusion during recent discussions, with the caveat that SoftBank’s stake in OneWeb would remain less than 50%.

Work on OneWeb’s previously announced initial fleet of more than 700 small, low-altitude satellites is “generally on schedule” for launches beginning next year, starting to market service over Alaska in 2019 and expanding virtually around the globe by the end of 2020, according to Mr. Wyler. During a weekend interview, he also said deployment of roughly 900 second-generation, higher-orbiting satellites by the mid-2020s–intended to create the first such large-scale, hybrid constellation on orbit–is projected to increase speeds roughly fivefold to 2.5 gigabits per second.

In October, Mr. Wyler told the Senate Commerce Committee that OneWeb’s network portends “a brighter future for the nearly half of Americans with substandard internet connections, primarily in rural areas.” His ultimate goal is to “fully bridge the global digital divide,” he told the panel, by bringing inexpensive internet links relying on light, versatile antennas to impoverished communities, schools and small businesses in developing countries.

With support from other investors such as Qualcomm Inc., Airbus SE and British billionaire Richard Branson, OneWeb appears to be the furthest along among a group of high-profile projects aiming to launch swarms of hundreds–or even thousands–of satellites at altitudes substantially below those currently used for the largest, most-advanced commercial communications spacecraft. Boeing Co. and Elon Musk’s Space Exploration Technologies Corp., separately backing two proposed systems, are still seeking final regulatory approvals related to spectrum and satellite designs, according to industry officials.

By contrast, Mr. Wyler’s project has final approval from the Federal Communications Commission to turn on domestic service within two years, barring major technical or manufacturing problems. The approval also is contingent on other conditions.

According to Mr. Wyler, his team also is “trying to lead the charge” in reducing orbital debris stemming from potential satellite collisions or failures. OneWeb’s satellites, weighing hundreds of pounds and expected to cost less than $1 million apiece, are designed to be “as high or higher in quality and reliability” than much larger models costing $150 million or more, he said.

An early financial backer of some of the largest internet companies on both sides of the Pacific, SoftBank continues to seek synergies with mobile-phone businesses and the portfolio of assorted technology companies it has assembled over the years. SoftBank also has created the world’s biggest tech investment fund, worth nearly $100 billion. The Vision Fund has been roiling the venture community with its sheer scale, lifting valuations and helping entrepreneurs bypass usual fundraising rounds.

Since its official launch in May with the backing of investors such as Saudi Arabia’s sovereign-wealth fund, the fund has invested hundreds of millions of dollars in companies that SoftBank founder Masayoshi Son believes will corner key technologies in a future of smarter, interconnected, and automated devices. OneWeb’s satellites are geared to help serve as the backbone for those applications, Mr. Son has said.

SoftBank, which has a 40% stake in OneWeb based on a prior investment, walked away from merger talks between its U.S. wireless carrier Sprint Corp. and rival T-Mobile US Inc., unwilling to relinquish control as the top shareholder of a spectrum Mr. Son believes will be valuable as everyday objects from cars to refrigerators increasingly communicate with one another.

Mr. Wyler, for his part, has long advocated the advantages of combining satellites circling the earth at different altitudes, arguing such synergies dramatically increase capacity and efficiencies. But unlike Mr. Musk’s concept, he doesn’t favor laser links between satellites on the grounds that such add-ons unduly increase weight and complexity.

A spokesman for SpaceX, as Mr. Musk’s company often is called, has repeatedly declined to respond to questions about details or progress of the entrepreneur’s proposed satellite project.

Write to Andy Pasztor at andy.pasztor@wsj.com and Mayumi Negishi at mayumi.negishi@wsj.com

Breaking the story

Andy Pasztor and Mayumi Negishi were first with the news that SoftBank Group Corp. has agreed to invest roughly $500 million more in satellite broadband provider OneWeb Ltd., according to sources, boosting the U.S. startup’s plan to offer significantly faster internet connections world-wide. This latest commitment would increase SoftBank’s total investment in the project to about $1.5 billion.

Timeline

December 11, 2017, 6:00

SoftBank to Invest Around $500 Million More in OneWeb Satellite-Internet Venture

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